Author: Jeevan A. Robinson - MNI Media | Date: 08 March 2019
President of The Montserrat Bar Association, Attorney-at-Law Jean Kelsick, has written to the Honourable Financial Secretary on Montserrat, Mr Colin Owen, outlining his concerns to do with the current ceiling for payouts under the Motor Vehicles Insurance (Third-Party-Risks) Act on Montserrat.
The letter was sent to FS Owen in his capacity as Supervisor of Insurance under the Insurance Act on Montserrat.
The ceiling for insurance payouts was last raised on Montserrat in 1982. Thus, Attorney Kelsick has outlined in his letter to the FS, that due to matters such as inflation, and also what he cites as “modern commercial realities”, those ceilings for motor vehicle payouts on the island are now too low.
Attorney Kelsick points to section 4 (1) (b) (v) and (vi) of the Insurance Act, where section 4(1) (b) (v) states that “an insurance company is not required to pay more than $50,000 to a third party for any one claim by any one person arising out of death or bodily injury. Section 4(1) (b) (vi) states that an insurance company is not required to pay more than $250,000 in total in relation to any number of claims for any one accident for each vehicle concerned arising out of death and bodily injury. “
The importance of raising the payout ceilings was outlined further to the Financial Secretary, by Attorney Kelsick pointing out that this matter was important "in order to avoid members of the public suffering an injustice."
He stated in his letter to the FS, that if for example:
“a victim of a traffic accident suffers a lifelong disability requiring expensive medical treatment or if dependants (including young children) make a claim arising out of the death of a parent breadwinner, the most an insurance company is required to pay is $50,000. There is at least one insurance company in Montserrat that takes refuge behind this ceiling. This means that if the insured tortfeaser is impecunious the maximum a victim can collect is $50,000.”
In other jurisdictions across the Caribbean with similar but more modern legislation, the equivalent ceilings are as follows:
Liability ceiling re any one claim by any one person
St. Lucia - EC$300,000
St. Vincent - EC$250,000
Cayman Islands - CI$1,000,000
Liability ceiling re total claims for any one accident for each vehicle
St. Lucia - EC$1,500,000
St. Vincent - EC$1,000,000
Cayman Islands - CI$5,000,000
Attorney Kelsick also shared that he had previously raised this issue with the Head of the Financial Services Commission (FSC), Mrs. Dulcie James, on the need to increase the payment ceilings on island.
Nothing was done about this matter according to Attorney Kelsick, hence him writing to the FS.
Kelsick is of the further view that the FSC on Montserrat: “focuses disproportionately on finding fault with paperwork and international anti-money laundering, terrorist financing and OECD compliance, which in the case of the latter is often of limited application to Montserrat. While one appreciates the importance of Montserrat not being blacklisted by the international community, the FSC seems to have forgotten that one of its primary functions as an insurance supervisor is to protect the interests of the man in the street.”
In his letter to the FS, he also raises the question of whether the FSC is properly vetting the adequacy of the reinsurance treaties that insurance companies selling policies in Montserrat must have.
Attorney Kelsick asserts that; “Unless reinsurance cover is adequate, insurance companies will be unable to pay claims in the event of a catastrophe such as a hurricane causing major damage.”
He illustrated this concern in the letter by citing past examples where Montserrat has had at least two insurance companies licensed to do business on the island but were unable to pay hurricane claims for this very reason.
“This issue is now of even greater concern given the increased frequency with which catastrophic hurricanes are predicted to hit the Caribbean region. The monitoring of the adequacy of reinsurance treaties is one of the most important functions of the Supervisor of Insurance."
On the motor Vehicle Insurance Claims payout ceiling matter, Attorney Kelsick is hoping that the Government of Montserrat will take steps to increase the ceilings to realistic levels, to ensure that Montserrat‘s public is properly protected.